GIC (India) to Ramp Up International Growth; planning to enter Brazil and Argentina

GIC to ramp up global biz, targets Rs 15k-cr premium

General Insurance Corporation of India (GIC) has set a target of Rs 15,000-crore premium income by 2015 as against Rs 9,350 crore in 2007-08. The reinsurance company has said that its international business will be the driver for the growth and to strengthen the business, it is planning to enter Brazil and Argentina among others.

GIC Chairman and Managing Director Yogesh Lohiya told Business Standard on the sidelines of an event organised by Star Health and Allied Insurance Company that the share of international business, which was estimated at 27 per cent at the end of March 2008, is expected to rise to 50 per cent by 2015.

Lohiya said compared to the domestic market, international business offered 20-25 per cent higher profits. The Indian reinsurer intends to focus on aviation reinsurance, where it is the fifth-largest player, and other businesses such as property, energy and marine.

To achieve this target, Lohiya said, the company is looking at foraying into new countries. At present, GIC has liaison, representative or branch offices in London, Moscow and Dubai. The insurer received a licence from the Brazilian government last week, which will allow it to foray into the reinsurance market in the Latin American country.

Over the next 10 days, the reinsurer intends to start offering property, casualty, marine and motor reinsurance services. The next step will be opening a branch office. The company is also planning to enter Argentina in 2009-10.

Asked whether the company would look at the US and Canada, Lohiya said, though GIC had written some business between August and September 2008, the company “is not interested in foraying into these two countries” due to legal and other reasons."

Source: The Business Standard

Snow Causes Disruption in London Market

According to wire service reports, severe disruption is being experienced to public transport in London due to heavy snow.

Many insurance and reinsurance operations in London sent their employees home early. A significant number of industry employees were unable to reach their offices altogether due to the adverse weather.

London buses have been canceled 'due to adverse weather and dangerous road conditions' says Transport for London. Most London Underground train lines are suspended or part suspended, with only the Victoria and Waterloo and City lines running a complete service at 0835 GMT.

The U.K. National Rail web site says that 'poor weather conditions are affecting services throughout the south of England.'

According to wire reports, a spokesperson for the London Stock Exchange PLC (LSE.LN) said that 'volumes are a little quieter than usual, but not particularly quiet.' The spokesperson did not provide precise details."

EXCLUSIVE-Greenberg fights to keep testimony private

Greenberg fights to keep testimony private:

"NEW YORK, Jan 27 (Reuters) - Maurice 'Hank' Greenberg, former chief executive of American International Group Inc, has gone to court to prevent New York's attorney general from releasing testimony Greenberg gave in a state lawsuit accusing him of fraud, according to court documents.

Greenberg's efforts to keep the testimony confidential are his latest attempts to rehabilitate his name and reputation, even as the company he once ran struggles to survive after receiving a massive taxpayer bailout.

In 2005, then Attorney General Eliot Spitzer sued AIG, accusing the insurer and Greenberg, now 83, of manipulating financial results and engaging in fraud.

In a motion in Manhattan state court on Jan. 20 by his lawyers Boies, Schiller & Flexner LP, Greenberg said he wanted to keep the testimony, during which he invoked the Fifth Amendment to the U.S. Constitution not to incriminate himself, confidential because it touched on confidential corporate documents.

The motion, a copy of which was obtained by Reuters, seeks a protective order to stop New York's current attorney general Andrew Cuomo from releasing details of the testimony.

'The NYAG, which has long attempted to convict Mr. Greenberg in the court of public opinion, should not be granted this extra-judicial advantage,' Greenberg's lawyers wrote"

Source: Reuters - EXCLUSIVE-Greenberg fights to keep testimony private

Brit poaches Aon Benfield director

Brit poaches Aon Benfield director

Andrew Bowers joins insurer's personal accident team

Brit Insurance has appointed Andrew Bowers to the personal accident team, reporting to Keith Thorogood within its Brit Global Markets business.

Bowers joins Brit Insurance from Aon Benfield, where he was a director in its Accident & Health division. In this role, he was responsible for the production and placement of business, with a focus on the Accident portfolio, and was a member of the senior management team.

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Prior to this, he was an accident & health director at Monument UK, where he helped to build and implement a new Accident, Health and Reinsurance division."

Source: Insurance Times

Transatlantic Full Year Income in Sharp Drop

Transatlantic Holdings Q4, Full Year Income in Sharp Drop: "The New York-based reinsurance group Transatlantic Holdings (TRH) became the first major reinsurer to announce its 2008 results. TRH reported net income for the year ended December 31, 2008 of $102.3 million, or $1.53 per common share (diluted), compared to net income of $487.1 million, or $7.31 per common share (diluted), in 2007, a 79 percent decline.

Net income for the fourth quarter of 2008 totaled $4.4 million, or $0.07 per common share (diluted), compared to $112.5 million, or $1.68 per common share (diluted), in the fourth quarter of 2007, a 96.1 percent decline.

President and CEO Robert F. Orlich described 2008 as 'an extraordinary year. Tumultuous activity in financial and credit markets caused significant impairment write-downs in our investment portfolio and Hurricane Ike, one of the costliest industry-wide insured catastrophes in history, also hurt results.'"

Source: Insurance Journal

Zurich: premiums have to rise; hopes to avoid job cuts-paper

Zurich Financial hopes to avoid job cuts-paper:

"ZURICH, Feb 1 (Reuters) - Zurich Financial Services AG (ZURN.VX) hopes to avoid job cuts as the insurance industry is still performing well, but premiums will have to rise, the Swiss insurer's head was quoted as saying on Sunday.

When asked in an interview with newspaper Sonntag whether Zurich will cut jobs, Chief Executive James Schiro was quoted as saying: 'I hope not. The insurance industry is still doing well. Life insurance is in demand, people are driving less and therefore there are fewer accidents.'

Premiums were likely to rise as business risks increase and as revenue from capital employed declines, Schiro was quoted as saying.

'We have to be very careful with our capital. We need it to cover the claims of our customers,' he said.

Zurich, Europe's fifth-largest insurer by market value, would go for an acquisition if a good opportunity were to arise, but the group would focus on expanding organically in growth markets such as Eastern Europe, Russia, China and Latin America as well as in Spain, where it was now one of the biggest players, Schiro was quoted as saying."

Source: Reuters

U.K. brokers confident insurance industry can survive financial crisis: Study | Business Insurance News, Analysis & Articles

U.K. brokers confident insurance industry can survive financial crisis: Study

LONDON—U.K.insurance brokers are confident that insurers will make it through the global financial crisis in good shape, a study reveals.

The study, by FWD Research, shows that 47% of 250 brokers surveyed in the United Kingdom have not changed their opinions about the strength and resilience of insurers since the credit crunch began. Nearly two-thirds said they felt it was unlikely that a top-10 U.K. insurer would fail this year.

Among brokers who have changed their opinions on insurer stability, the most commonly held concern, indicated by 15% of the brokers, was that levels of security had diminished. Ten percent said they think more carefully about which insurer to place business with and 9% said they now examine credit ratings."

Source: Business Insurance

Artemis: Willow Re downgraded again; will default on interest payment

Willow Re downgraded again; will default on interest payment

"It’s become apparent that Allstate’s Willow Re catastrophe bond has been downgraded again by Standard & Poor’s due to a notice from Allstate that it is going to default on it’s scheduled interest payment. The rating on Willow Re Ltd.’s Class B 2007-1 series notes has been downgraded to ‘D’ from ‘CC’. An interest payment was due today, February 2nd. There’s a five day grace period before default is called but Allstate has notified S&P to say that it does not expect to have sufficient funds to make the interest payment.

This could harm confidence in the insurance-linked security market at a time when it is needed to help encourage investors to take stakes in the deals currently in the pipeline. As Willow Re Ltd. will have to be settled if it defaults on the interest payment, and the total return swap counterparty Lehman Brothers failed so is not available to make up any collateral deficiencies, investors risk not receiving their investment pricipal back. This could be a blow to the market at a time when investor confidence is essential. Issuers are going to have to choose swap counterparties very carefully and work to structure deals in such a way that investors feel issues such as counterparty security are being addressed"

Source: Artemis.bm

AIG in talks with government on guarantees: WSJ

AIG in talks with government on guarantees

WASHINGTON - American International Group (NYSE:AIG - News), the insurer rescued from collapse by the government in September, is in discussions with Washington about a federal backstop for some of its assets, The Wall Street Journal reported on Saturday.

AIG is also considering selling units through public offerings, the newspaper reported, citing an interview with AIG Vice Chairman Paula Reynolds.

'We're looking at a broader array of recapitalization options,' Reynolds said.

'We both realize that the environment's changing and we have to adjust to that environment,' she said, referring to the federal government.

Backstopping the insurer's assets would be similar to guarantees the government provided for assets belonging to Citigroup (NYSE:C - News) and Bank of America (NYSE:BAC - News), the Journal reported."

Source: WSJ: Reuters via Yahoo! Finance

JLT appoints Aon's Bear as head of transport, engineering and utilities practice

JLT appoints head of transport, engineering and utilities practice "JLT appoints head of transport, engineering and utilities practice

LONDON—Brokerage firm Jardine Lloyd Thompson Ltd. in London has recruited Andy Bear from broker Aon Corp. to head up a new transport, engineering and utilities industry practice group, JLT announced Monday.

JLT has a number of industry sectors units to serve clients, including life sciences, and communications and technology, noted Ron Hayes, managing director of JLT’s Global Risk Solutions.

“Our clients value true industry expertise with teams made up of people from both the insurance sector and their own industry,” Mr. Hayes said. “The creation of a transport, engineering and utilities practice with a global remit is an exciting development for our clients and for JLT.”"

Source: Business Insurance

Ike Update: Revised Shareholders’ Funds Impact

Ike Update: Revised Shareholders’ Funds Impact "February 2nd, 2009

Another four companies increased their Hurricane Ike estimates this week: Arch Capital Group Ltd, Chaucer Holdings plc, Transatlantic Holdings Inc., and Argo Group International Holdings Ltd. This continues a trend that began two weeks ago.

Arch increased its net loss estimate for Hurricane Ike (after reinsurance recoveries and net of reinstatement premiums) from USD133million to USD293 million (120 percent). This was due to increased estimates of industry insured losses of USD18bn to USD21 billion and additional information from clients reflecting larger losses than initially estimated. Approximately two thirds of the increase came from Arch’s expected claims in the onshore and offshore energy lines of business.

Argo Group increased its pre-tax loss estimate for Hurricane Ike (including reinstatement premiums and estimated reinsurance recoveries) from USD60 million to USD75 million (25 percent). Argo Group’s International Specialty segment accounted for USD12.1 million of the increase with the remainder incurred in the reinsurance segment.

Chaucer increased its Syndicate 1084 loss from Hurricanes Gustav and Ike (net of reinsurance recoveries and reinstatement"

Source: Guy Carpenter

Marine Insurance Group Sees 'Tough Times' for Insurers

Marine Insurance Group Sees 'Tough Times' for Insurers: "According to Deirdre Littlefield, president of the International Union of Marine Insurance (IUMI), 'While the insurance industry may be more insulated from failure than others in the financial sector, it will not entirely escape the damage done by the current crisis, and it will see winners and losers over the next 24 months.'

Her address, to members of the International Underwriting Association of London, also indicated that marine insurance is inextricably tied to the state of the global economy and to world trade, so there will be a challenging marine environment going forward.

The IUMI bulletin explained: 'Over the last several years, shipowners, cargo interests and offshore energy operators have enjoyed marine insurance protection often at bargain prices. This occurred during a period of record growth in global trade, the rapid expansion of the world fleet, and unfortunately a rise in claims as vessels and their crews were worked hard to keep pace with growing demand.'"

Source: Insurance Journal

Omega raises £124m with issue of shares

"According to Insurance Day, Bermuda-based Omega Insurance Holdings has raised £124m ($160m) through the issue of 95.9 million new common shares. The shares began trading on London’s Alternative Investment Market on Friday."

Source: Insurance Day - Insurance Day News Centre

Further Rulings in AIG / Gen Re's Finite Reinsurance Criminal Action

Reinsurance Focus: "AIG’s former vice-president of reinsurance has been sentenced in the criminal finite reinsurance prosecution to four years imprisonment, and fined $200,000. The court also has entered a Final Order of Forfeiture, in the amount of $5 million jointly and severally for all defendants. Gen Re has paid the $5 million amount in full. Perhaps more significantly, defendant Ferguson has appealed his conviction, and the government has appealed his sentence. The appeal means that the issue of the criminalization of the underlying disputed reinsurance contracting will be addressed by the Second Circuit."

Source: Reinsurance Focus